Cenvat credit on steel items for capital goods repair and fabrication received only partial pre-deposit relief

Eligibility of Cenvat credit on steel items used for repair of furnace walls, fabrication of EOT cranes, storage tanks and supporting structures was examined under the Cenvat Credit Rules, 2004. The Tribunal noted support for credit where steel items were used for repair and maintenance of capital goods and for fabrication of EOT cranes, but treated the position on supporting structures and storage tanks embedded in the earth as requiring fuller examination at final hearing. On a prima facie basis, the appellant was found entitled only to partial relief, so full waiver of pre-deposit was declined and a deposit condition was imposed.

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Issues: Whether the appellant was entitled to full waiver of pre-deposit and stay of recovery in respect of the disputed Cenvat credit on steel items used for fabrication of supports, storage tanks, EOT cranes, and repair of the induction furnace.

Analysis: The dispute turned on whether the steel items used for repair of the furnace walls, fabrication of EOT cranes, and fabrication of tanks and supporting structures could be treated as eligible inputs or items used in relation to capital goods under the Cenvat Credit Rules, 2004. The Tribunal noted the authorities supporting credit for repair and maintenance of capital goods and for EOT cranes, while observing that the position regarding supporting structures and storage tanks embedded in the earth required fuller examination at final hearing. On the prima facie assessment, the appellant showed a case for partial relief but not for total waiver.

Conclusion: Full waiver of pre-deposit was declined. The appellant was directed to deposit Rs. 75,000, and upon such deposit the balance demand, interest, and penalty was stayed pending disposal of the appeal.

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